MESSAGE FROM MAHAD MOHAMED

1. U.S. Digital Asset Broker Reporting and Form 1099‑DA

The IRS has finalized broker reporting rules requiring centralized digital asset platforms to issue Form 1099‑DA.

For the first time, digital asset reporting will begin to resemble traditional securities reporting at scale.

For Canadians with U.S. exposure, dual citizenship, or trading activity on U.S. platforms, this means:

• Increased automated matching between exchange data and tax filings
• Greater scrutiny of cost basis accuracy
• Reduced tolerance for historical reporting inconsistencies

Cross‑border coordination is no longer optional. Filings must align.

2. Canadian Capital Gains Inclusion Changes

Canada's capital gains inclusion framework has shifted for individuals realizing larger annual gains.

For business owners, real estate investors, and portfolio holders, this materially impacts after‑tax outcomes on liquidity events.

Timing now matters more.

Decisions involving:

• Sale of private corporation shares
• Disposition of investment real estate
• Crystallization of gains
• Estate freeze implementation

require disciplined modeling rather than reaction.

The cost of triggering gains without planning has increased.

3. Expanded Alternative Minimum Tax (AMT)

Canada's revised AMT rules are broader and more impactful than in prior years.

Individuals claiming:

• Lifetime capital gains exemption
• Significant charitable donations
• Employee stock option deductions
• Large capital gains

must now account for AMT exposure when structuring transactions.

Even when recoverable, AMT can create immediate liquidity pressure. Proper modeling must incorporate both regular tax and minimum tax frameworks.

4. Enhanced Trust Reporting and CRA Disclosure

Canada's expanded trust reporting rules represent one of the most significant transparency shifts in recent years.

Family trusts, holding companies, and certain estate planning structures now require detailed disclosure of trustees, beneficiaries, and settlers.

The direction is unmistakable: greater visibility.

Planning structures must now withstand not only tax analysis, but reporting scrutiny.

5. Cross‑Border Canada–U.S. Alignment

Information sharing between Canada and the United States continues to strengthen under established agreements.

For individuals with cross‑border ties:

• T1135 foreign asset reporting must align with U.S. disclosures
• FBAR and Form 8938 remain critical
• U.S. estate tax exposure on U.S. situs assets must be evaluated
• Residency determinations must be fact‑driven and defensible

Inconsistent reporting is increasingly detectable.

6. Estate Planning and Deemed Disposition at Death

Under Canadian law, most assets are deemed disposed of at fair market value upon death.

For private corporations, concentrated portfolios, and real estate holdings, this can generate significant tax without immediate liquidity.

Estate planning today must integrate:

• Corporate structuring
• Liquidity planning
• Insurance solutions
• Intergenerational transfer strategy

Estate planning is not about documents alone. It is about preserving continuity.

7. Corporate Structuring and Passive Income Thresholds

For Canadian‑controlled private corporations, passive income continues to impact access to the small business deduction.

Retained earnings strategy, dividend planning, and capital dividend account utilization remain critical tools in optimizing tax integration.

The corporate structure should function as a planning instrument, not merely an operating vehicle.

8. The Broader Shift Toward Data‑Driven Enforcement

Perhaps the most important theme of 2026 is structural rather than legislative.

Tax authorities are investing heavily in analytics, automation, and international cooperation.

Audit selection is increasingly data‑informed.
Disclosure requirements are expanding.
Cross‑border transparency is strengthening.

This is not an environment for informal positioning. It is an environment for disciplined architecture.